Transend tightens belt, still some notches to go

//Transend tightens belt, still some notches to go

Transend tightens belt, still some notches to go

Transend’s Transitional Revenue Proposal 2014/15 – 2018/19 has demonstrated a range of cost reduction proposals but, in the eyes of the TSBC, they have another $80M of savings to pass on to the
Tasmanian residential and small business sector’, said Robert Mallett, Executive Officer of the Tasmanian Small Business Council, in Hobart today.

‘Transend is required to submit a detailed proposal to the Australian Energy Regulator (AER) outlining its case for income and expenditure for the next revenue period. This should take place after meaningful consultation but in this case the TSBC has serious worries on the extent to which Transend endeavoured to consult.’

The TSBC has made a submission to the AER outlining some of its concerns including:

  • the lack of transparency for the capital expenditure (capex) and operational expenditure (opex) forecasts for the period
    a consistent lack of accuracy in forecasting the electricity demand, which has been falling steadily in recent years, leading to an over investment in capex.
    A rate of return on investment which is significantly above the rate recommended by the AER.  This alone accounts for over $57 million in excessive increased revenue (potential savings).
    an inappropriate rate request on its cost of debt. This is even more significant given the significant rate discount Transend is able to borrow money at, and leads to an artificial increase
    in energy charges.
    ‘The proposal submitted by Transend is considered a “transitional proposal” however significantly more clarity should have been put around key assumptions and advice sought from key consumer groups prior to it being submitted.’

‘Tasmanian small business electricity consumers continue to be held at the mercy of a government monopoly that seems to be quite insensitive to the implications its proposals have on struggling
Tasmanian enterprises.’

2015-09-21T08:12:38+00:00September 20th, 2015|

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